The Beating Heart of a Company | Technological Leadership Institute
So what's with the title of this week’s post? Knowing I am a person with a technical background, who worked most of my life on product development, you must be expecting I will proclaim the R&D or Laboratory function the most important in any business. But you would be wrong.
You might then think, “OK, he is giving credit to his friends and allies in Marketing and Sales, knowing that without those customer-centric roles, there would be no business.” That is all true, but they do not keep the blood moving.
For any business that makes money by providing a physical product to the customer, the ‘beating heart’ has to be manufacturing and supply chain functions. Whether the firm makes it own products or supplies products manufactured by others, delighting customers every hour of every day is the mission.
In our highly competitive world, that must be done at ever-lower costs. Surprises can and do happen. But a well-constructed and well-managed supply chain must overcome the unexpected and still deliver.
The costs of a slip-up can be high. For example, a staple of my daily diet is made by a famous, reliable American company. So when it was out-of-stock this summer at multiple area grocery stores, I talked with the store managers to complain. It turns out that the company decided to consolidate the manufacturing of several products into a single plant, as a cost-control move in the face of weak product demand. But poor planning by the manufacturer resulted in empty store shelves for more than three months!
As a result, I sampled several substitutes, and have now settled on one that is quite good. I won’t be going back anytime soon. Granted, losing one customer is not the end of their world. But surely, I was not the only one who thought that way. A disruption in the supply chain can give the whole business a "heart attack."
To make the manufacturing role extra challenging, new products need to enter the mix on a regular basis. Every factory wants the growth that comes with making and selling new things. But the actions it takes to get them scaled-up on the factory floor are often in conflict with the imperative of keeping operations humming every minute.
That is where leadership gets tested. My experience is that wise leaders find a way to satisfy both needs, although that is never easy. They set a high standard for excellence in operations and require that any interruptions for experiments be important to the business success, well planned and done with a cooperative spirit at all levels.
Only through clear vision, open communications and a common understanding of customer and business needs can a supply chain thrive. That means there will be lots of “negotiation” with the manufacturing, marketing and laboratory functions. But with a common sense of purpose, the business can succeed.
For a person, a beating heart is not enough. Lungs are needed for fresh oxygen and, without a brain, exercise is pretty meaningless. The analogous is true for business. Only through working together can manufacturing, laboratory and marketing satisfy customers and grow a business.
This blog is part of a 14-week series by TLI Senior Fellow and Honeywell/Edson W. Spencer Chair in Technology Management Steve Webster. Each post will focus on one concept or idea discussed in his course MOT 5001- Technological Business Fundamentals. Other posts in the series can be found here.